High-priced jobs
Posted by Richard on September 20, 2010
The City of Los Angeles used its $111 million in ARRA "stimulus" money to "create or retain" 55 jobs. That's $2 million per job. They'd better get those printing presses cranked up in Washington, because at that rate they're going to need another several trillion dollars to "put America back to work."
I wonder how many jobs are created for every $111 million in private sector investment.
Subscribe To Site:
David Bryant said
”I wonder how many jobs are created for every $111 million in private sector investment.”
I recall reading an article in ”The Economist” some years ago that indicated total capital investment per employee in the United States was in the range of $200,000 to $250,000. So I think the answer to your question is 450 – 550, roughly.
Just to check my recollection, I rustled up some figures for a few big American companies — General Electric, McDonald’s, Hewlett Packard, and Procter & Gamble. The first three are roughly the same size in terms of employees (300,000 to 400,000 each); P&G is somewhat smaller, at 127,000 employees.
Anyway, I took figures from Standard & Poors reports, all as of 12/31/2009 and arrived at the following ratios.
Total capital per employee: GE — 2,083,000; MCD — 64,000; HPQ — 179,000; PG — 719,000
Common Equity per employee (excludes bonded indebtedness): GE — 386,000; MCD — 37,000; HPQ — 133,000; PG — 484,000.
Statistics for the four companies combined: 718,000 total capital per employee; 209,000 common equity per employee.
I think these statistics are roughly consistent with my recollection of the article in ”The Economist”. In particular, the “total capital” figure for General Electric is skewed significantly to the high side because of the large amount of commercial paper floated by GE Capital.